Correlation Between Saga Pure and Atlantic Sapphire

Can any of the company-specific risk be diversified away by investing in both Saga Pure and Atlantic Sapphire at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Saga Pure and Atlantic Sapphire into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Saga Pure ASA and Atlantic Sapphire As, you can compare the effects of market volatilities on Saga Pure and Atlantic Sapphire and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Saga Pure with a short position of Atlantic Sapphire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saga Pure and Atlantic Sapphire.

Diversification Opportunities for Saga Pure and Atlantic Sapphire

0.63

Correlation Coefficient

Saga Pure  Atlantic Sapphire

Poor diversification

The 3 months correlation between Saga and Atlantic is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Saga Pure ASA and Atlantic Sapphire As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Sapphire and Saga Pure is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Saga Pure ASA are associated (or correlated) with Atlantic Sapphire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Sapphire has no effect on the direction of Saga Pure i.e., Saga Pure and Atlantic Sapphire go up and down completely randomly.

Pair Corralation between Saga Pure and Atlantic Sapphire

Assuming the 90 days trading horizon Saga Pure ASA is expected to generate 0.14 times more return on investment than Atlantic Sapphire. However, Saga Pure ASA is 6.96 times less risky than Atlantic Sapphire. It trades about -0.07 of its potential returns per unit of risk. Atlantic Sapphire As is currently generating about -0.11 per unit of risk. If you would invest  125.00  in Saga Pure ASA on November 28, 2024 and sell it today you would lose (4.00) from holding Saga Pure ASA or give up 3.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Saga Pure ASA  vs.  Atlantic Sapphire As

Saga Pure ASA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Saga Pure ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Saga Pure is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Atlantic Sapphire

Risk-Adjusted Performance

Very Weak

Over the last 90 days Atlantic Sapphire As has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Saga Pure and Atlantic Sapphire

The main advantage of trading using opposite Saga Pure and Atlantic Sapphire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saga Pure position performs unexpectedly, Atlantic Sapphire can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Atlantic Sapphire will offset losses from the drop in Atlantic Sapphire's long position.

The idea behind Saga Pure ASA and Atlantic Sapphire As pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.